Liquor Licensing: Red Tape On Australian Businesses

Workplace relations, taxation and the regulation of alcohol are only some of the costly and complex burdens facing Australian hospitality and related industries. This paper is an enquiry into one subset of these burdens, liquor licensing, which impacts businesses from supermarkets to small bars. Liquor licensing refers to state-based regulatory restrictions on the sale of alcohol on premises (e.g. bars), off-premises (e.g. bottle shops) as well as special events (e.g. music festivals). For business, these restrictions are considered to be one of their most over-regulated activities.

The aim of this report is not to mount arguments over the ultimate rationale or justification of regulations on the sale of alcohol, but to examine how the structure and scope of regulations can be reformed to minimise economic distortions and cost. The core of our research is a survey and analysis of Australian liquor licensing regulations, and the direct and indirect costs they impose on business. The main finding is a time consuming compliance process before trading can commence including complex tiered application and annual fees, reaching into the tens of thousands of dollars.

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Darcy Allen is research fellow at the Institute of Public Affairs and a final year PhD Candidate in economics at RMIT University in Melbourne. At the IPA Darcy's current focus is the economics of regulation and innovation. His PhD dissertation develops a new theoretical approach to innovation economics, focusing on the private governance of entrepreneurial information in the early stages of new technologies, such as blockchains and 3D printing. Darcy’s research, opinion pieces and comments have featured, among other places, on the pages of The Australian, Australian Financial Review, The Weekly Times, Sydney Morning Herald, The Age, The Canberra Times, and The West Australian. Darcy’s writing has featured in peer-reviewed academic journal articles, conference papers, book chapters, and has been regularly presented at conferences.